Lending for house purchase up as more first-time buyers get a foot on the ladder

13th October 2017

Lending for house purchase rose in August by both value and volume to be higher than both the preceding month and a year earlier.

First-time buyers borrowed £5.7bn, 16% more than in July and 12% more than in August 2016.

They took out 34,400 mortgages, 14% up on July and 9% more year-on-year.

Home movers took out 38,500 loans, up 17% on a monthly basis and 13% on an annual basis. They borrowed a total of £8.4bn, 18% up on July and 20% up on August last year.

Borrowing by home movers was the highest since March 2016, when the market was artificially distorted by the buying stampede ahead of the introduction of the 3% Stamp Duty surcharge on the purchase of additional properties.

Buy-to-let lending in August totalled £3.1bn, down 3% on July but the same as in August last year. Almost all of this was down to remortgaging and not house purchase. There were 12,900 buy-to-let remortgages in August, but only 6,500 loans for buy-to-let property purchase.

The average amount borrowed by a first-time buyer in August was just over £140,000, up from £139,000 the month before.

The amount borrowed by home movers rose to £182,750.

All the figures are from the trade body UK Finance.

John Phillips, group operations director at Just Mortgages and Spicerhaart, said: “The latest figures once again show how the UK’s housing market is increasingly being propped up by first-time buyers and home movers.

“However, the picture for buy-to-let is once again a less positive one, although this was to be expected.

“The boost for first-time buyers is clearly a result of the collapse in buy-to-let purchases which was of course fuelled by changes in Stamp Duty.”